Stocks, Gold, Silver, and the printing press.

[88GT]

These signs are ever increasing! You are really bringing it into focus. This really gives me a pause as I am coming late to the prepping game. I am not financially able to make huge purchases or mass quantities on short notice. What suggestions other than beans n bullets and debt reduction would you make? Or is it really too late for some of us? Inquiring minds want to know!

This is just me, but I wouldn't worry too much about the debt reduction on non-secured debt and any extraneous secured debt. It would be wise to pay down as much on your primary residence simply from the standpoint of having fewer hands in the cookie jar laying claim to it.

But your dollars are worth X now. If, okay, when inflation hits, they'll be worth some fraction of X. Which means two things. First, from the standpoint of you as a consumer, you're buying power is diminished. Your dollar will only buy the half bottle of shampoo where it used to buy 3/4. Instead of 4 cans of beans, your dollar will only be able to buy 2.

The second is from the standpoint of having debt and piggybacks off the first: why pay back your creditors with dollars having X value, when you can pay them back with dollars having, say, X/2 value?

Use the higher value of the dollar now and purchase things of value to YOU. Particularly those that you'll use in the future but will be forced to buy less of for the same number of dollars. (It may sound silly, but I'm stocking up on hygiene items in addition to the food and water stuffs.) When the dollar crashes in the future, they aren't going to recalculate the new dollar's relative value to the old one and change the amount of debt owed to reflect that. You'll still owe a flat number of dollars regardless of their relative value.

It's an oversimplified explanation, but it hits the meat of the issue IMO.

 

[model67a]

If everyone does sell off there holdings it is guaranteed the prices will fall due to the availability of the stocks. That is the way the shorts work. They borrow stock and sell them at a premium and flood the market. When the price falls they buy the stocks back at the lower price and give them back. That is how they make their profit!!! If you do as some on the thread recommend and sell your stock you will be helping them prove themselves correct!!

 

[ArmedProgrammer]

This is just me, but I wouldn't worry too much about the debt reduction on non-secured debt and any extraneous secured debt. It would be wise to pay down as much on your primary residence simply from the standpoint of having fewer hands in the cookie jar laying claim to it.

But your dollars are worth X now. If, okay, when inflation hits, they'll be worth some fraction of X. Which means two things. First, from the standpoint of you as a consumer, you're buying power is diminished. Your dollar will only buy the half bottle of shampoo where it used to buy 3/4. Instead of 4 cans of beans, your dollar will only be able to buy 2.

The second is from the standpoint of having debt and piggybacks off the first: why pay back your creditors with dollars having X value, when you can pay them back with dollars having, say, X/2 value?

Use the higher value of the dollar now and purchase things of value to YOU. Particularly those that you'll use in the future but will be forced to buy less of for the same number of dollars. (It may sound silly, but I'm stocking up on hygiene items in addition to the food and water stuffs.) When the dollar crashes in the future, they aren't going to recalculate the new dollar's relative value to the old one and change the amount of debt owed to reflect that. You'll still owe a flat number of dollars regardless of their relative value.

It's an oversimplified explanation, but it hits the meat of the issue IMO.

Effectively with this approach you are taking a short position in US Dollars. As with any short position, one must exercise some caution. If you can't cover the margin calls (loan repayment schedule), then you get caught (effectively) in a bad spot and will lose whatever is put up as collateral. I personally think that to engage in any loan but especially an non-secured loan with NO intent to repay is fraud. While one technically can get away with it, I sure choose not to go there.

The other danger is that you buy the physical commodity and instead of storing it, you consume it. Or it gets consumed by depreciation, as in a new car losing value when you drive it off the lot.... While shorting the dollar may make a lot of sense, I would be careful in predicting that the dollar will collapse X amount in Y time. The markets will make a fool out of the smartest trader when timing gets involved.

 

[SemperFiUSMC]

Effectively with this approach you are taking a short position in US Dollars. As with any short position, one must exercise some caution. If you can't cover the margin calls (loan repayment schedule), then you get caught (effectively) in a bad spot and will lose whatever is put up as collateral. I personally think that to engage in any loan but especially an non-secured loan with NO intent to repay is fraud. While one technically can get away with it, I sure choose not to go there.

The other danger is that you buy the physical commodity and instead of storing it, you consume it. Or it gets consumed by depreciation, as in a new car losing value when you drive it off the lot.... While shorting the dollar may make a lot of sense, I would be careful in predicting that the dollar will collapse X amount in Y time. The markets will make a fool out of the smartest trader when timing gets involved.

True. I'm purchasing commodity items like food, toilet paper and the like as a sort of a hedge. I have a travel trailer I could live in if things collapse. I own property free and clear (save the annual rent payment I must pay the state). I can live out of my travel trailer for years. Ideal lifestyle. Not even close. Adequate? Yes.

I also have a place that has electric generation on site, a cabin, well and septic. I could live there indefinately, although part of the year would be unbearable.

Point is, look down the road some period of time and consider procuring the items necessary to live, whatever they may be. Not what you want, but what you need.

 

[dom1104]

True. I'm purchasing commodity items like food, toilet paper and the like as a sort of a hedge. I have a travel trailer I could live in if things collapse. I own property free and clear (save the annual rent payment I must pay the state). I can live out of my travel trailer for years. Ideal lifestyle. Not even close. Adequate? Yes.

I also have a place that has electric generation on site, a cabin, well and septic. I could live there indefinately, although part of the year would be unbearable.

Point is, look down the road some period of time and consider procuring the items necessary to live, whatever they may be. Not what you want, but what you need.

This.

Besides, you end up with a nice vacation cabin, a nice trailer for vacations, and food always goes up in price, so you save money long haul.

Win-Win.

 

[88GT]

Effectively with this approach you are taking a short position in US Dollars. As with any short position, one must exercise some caution. If you can't cover the margin calls (loan repayment schedule), then you get caught (effectively) in a bad spot and will lose whatever is put up as collateral. I personally think that to engage in any loan but especially an non-secured loan with NO intent to repay is fraud. While one technically can get away with it, I sure choose not to go there.

I don't recall suggesting non-repayment.

The other danger is that you buy the physical commodity and instead of storing it, you consume it. Or it gets consumed by depreciation, as in a new car losing value when you drive it off the lot.... While shorting the dollar may make a lot of sense, I would be careful in predicting that the dollar will collapse X amount in Y time. The markets will make a fool out of the smartest trader when timing gets involved.

Nor do I recall predicting a time line or a value loss.


On a side note: of course I intend to consume the products I buy. That's why I buy them. But I'm buying on a schedule that exceeds my consumption rate as a hedge against the loss of buying power a future dollar might have. Inflationary price hikes would have to be postponed for the next 2-5 years for my efforts to be negated. Or we would have to have one of the most magnificent economic turn-arounds in history for my purchases to lose value against the dollar that bought them. Since I don't see either happening, I'll continue my current purchasing habits, thank you.

 

[ATOMonkey]

A short position against the dollar is always a safe bet. In fact, it's pretty much a guarantee.

When was the last time the inflation rate was negative?

 

[smokingman]

Larry Summers, Obama's Top Economic Adviser, Makes The Case For Another Round Of Stimulus Spending

In his lengthy speech, Summers describes the U.S. economy's precarious situation. The budget is ballooning, Summers said, but stimulus measures are the only way get the economy growing again. And, unless the economy grows, the federal budget can't decrease.


Kind of what I thought would happen.Just wait a few more weeks,then the real fun begins.

Gold and Silver are still pretty safe bets as the FED is already talking about QE Part 3.

January 5,2011

 

[ATOMonkey]

For those without the means to buy gold and silver, BUY FOOD!!! Buy it now, and buy as much as you can afford. Buy clothes and soap too.

If you're fed, clothed and clean, you'll be at least one step ahead of the rest of the people blissfully charging into oblivion.

 

[smokingman]

Global food prices rose to a fresh high in December, according to the UN's Food and Agricultural Organization (FAO). Link ....

BBC News - World food prices at fresh high, says UN

 

[smokingman]

...this is getting to easy.
MISS: December Retail Sales Are Worse Than Expected

Read more: MISS: December Retail Sales Are Worse Than Expected


​

Next step,reveal a new stimulus plan.

DOW:11,787 up

Gold:1360.5

Corn: 648.75 Chart:Corn (C, CBOT): Monthly Price Chart

 

[smokingman]

Commodity food and beverage index chart one year(it goes from 30 years to 6 months). Commodity Food and Beverage Price Index - Monthly Price - Commodity Prices


metals 12 month Commodity Metals Price Index - Monthly Price - Commodity Prices


Corn Maize (corn) - Monthly Price - Commodity Prices

and the largest mover of the last year...cotton. Cotton - Monthly Price - Commodity Prices

 

[ol' trucker]

Commodity food and beverage index chart one year(it goes from 30 years to 6 months). Commodity Food and Beverage Price Index - Monthly Price - Commodity Prices


metals 12 month Commodity Metals Price Index - Monthly Price - Commodity Prices


Corn Maize (corn) - Monthly Price - Commodity Prices

and the largest mover of the last year...cotton. Cotton - Monthly Price - Commodity Prices

Thank's for the charts. very interesting. noticed that the biggest jump until now, in all of the charts were around the time of the last presidential election. kind of telling. I know there are alot of things made with cotton. but don't understand why the jump in cotton is so high? seams like there are plenty of sheep these days.

 

[smokingman]

Thank's for the charts. very interesting. noticed that the biggest jump until now, in all of the charts were around the time of the last presidential election. kind of telling. I know there are alot of things made with cotton. but don't understand why the jump in cotton is so high? seams like there are plenty of sheep these days.

Cotton soars to new high on China cold - Telegraph

I am shocked,but one of the 6 reasons listed was the decline in the purchasing power of the dollar.

 

[smokingman]

Obama pushes on job creation, amid din over Egypt | Reuters

Innovation | The White House

Complete White house press release.


This of course as the SBA is defunct.Not that it ever was very effective.

Hey I know how we can fund our debt.Lets print money now and not have to pay for it for 100 years!....oh...The treasury already had that idea?
Geithner Gone Wild: Treasury Entertains 100 Year and GDP-Linked Bonds to Fill New $2.4 Trillion "Demand" | zero hedge

Limit up on cotton almost every day this week.Corn as well.
Commodity Whack-A-Mole | zero hedge

I may have under estimated the power of inflation to prop up the stock markets,but the end result will be the same.Also of note American Eagle silver coins hit an all time sales record in January(by more than 50% from the previous record and a 100% increase year over year). 2011 Silver Eagle Bullion Coins Shatter Monthly Sales Record in January | Silver Coins Today

Then why is it down you ask? Look no further than the commodities desk at JPMorgan chase.They now hold more short interest than there is physical silver in the world.Do not worry though,when the price does spike at some point and they are called for delivery the US tax payer can bail them out...again.

Just one more bit of news.The Federal Reserve bank is now the largest holder of US debt.It passed Japan last year,and this month it has now passes China.U.S. Fed Is Now Biggest Holder Of U.S. Gov't Debt! | Economic Crisis Advice Writings And Financial Crisis Warnings By June of this year the Fed will hold more US government debt than China and Japan combined.

Feb 4,2011

 

[smokingman]

On a side note.I talked with a Meat manager at Marsh(also a member here).In 2010 for super bowl Sunday lean ground beef was on sale for $1.18,and they where making 12 cents per pound.This year it is on sale for 1.88,and they are losing money.

 

[smokingman]

Europe should cut some Greek debt: El-Erian - MarketWatch

 

[junglerogue]

I posted this a while back, it's a news bit from Vanguard on the bank collapse in Argentina. It could be so eerily similar here in the US if the government hadn't bailed out our own financial institutions.

 

[smokingman]

IMF discusses plan to replace dollar as reserve currency - Feb. 10, 2011

 

[smokingman]

M2 Grows By $40 Billion In One Week, Hits Fresh All Time High | zero hedge

M2 being dollars in circulation.

http://www.zerohedge.com/sites/default/files/images/user5/imageroot/von havenstein/M2 2.11.jpg